Kerry Tasker

In looking back at nearly a year of COVID-19, there are unexpected positives: According to an August 2020 article by Mike Stachura in Golf Digest, “Golf Datatech tabulated sales for July [2020] to be the highest for a single month since the company began tracking information in 1997. Sales at on- and off-course retailers were $388.6 million, which easily surpassed the previous best two months (June 2007 at $368.1 million and June 2006 at $364.0 million).”

According to ReportLinker, a market research organization, the home gym equipment market (by revenue) is expected to grow at a compound annual growth rate of close to 9 percent during the period 2019 to 2025. “The industry has been witnessing high growth opportunities during 2020 and are likely to continue in 2021 owing to the outbreak of the COVID-19 pandemic and subsequent shutdown of gyms and health clubs across the globe.”

Meanwhile, Progressive Farmer Senior Editor Dan Miller reported in a May 2020 article published on AgFax that “a report of farm machinery sales in March hinted at the possible coming impact of COVID-19 on the industry. The pandemic, some speculated, would bring down the hammer on sales in April. But that did not happen.”

Instead, year-over-year tractor sales were up 12.3 percent in April 2020, and “tractor units sold rose on a 16.2 percent increase in sales of tractors 40 horsepower and below… The strong result in this category might be the result—and there is some speculation here—of newly working-from-home weekend hobby farmers investing in equipment to complete long-overdue projects.”

That at-home project and activity equipment purchasing isn’t limited to agriculture, notes Craig Taylor Equipment President and CEO Chris Devine.

Craig Taylor Equipment provides sales, rentals, parts, and service for equipment ranging from STIHL chainsaws to Doosan heavy construction equipment, so its customer base also runs the gamut from individuals working on home projects to some of Alaska’s largest contractors.

“What’s been fascinating to us, which was not expected in March when things really started to hit the fan, is that our retail business—although it’s been hamstrung by just the physical restrictions of what we’re dealing with—the actual demand has been extremely strong… And we’re seeing this in all retail categories: four wheelers, snowmachines, cars,” Devine says.

As far as Devine can tell, “What seems to be happening is there’s a lot of money floating around, and folks are looking to spend it. Specifically in our scenario, our customer base, in a lot of ways, they have a little bit more discretionary income—John Deere’s not necessarily the cheapest brand out there—and those folks have not been impacted by this crisis as much.”

Since the pandemic turned most office occupations into at-home positions, workers with a generally higher level of income are spending all day in their own environment, constantly reminded of projects that were easily put off or neglected before. “These folks are sitting in their houses, staring at their front lawn going, ‘Why don’t I finally get around to doing this yard project, or this driveway project,’” he says.

In fact, for Craig Taylor’s retail side, Devine says a significant challenge presented by the pandemic in 2020 was keeping inventory in stock for customers to purchase. “The demand has been through the roof: our biggest problem this year in the retail side was that we are completely out of inventory, and John Deere can’t provide it fast enough.”

And it’s a nationwide trend. According to Devine, April 2020 broke a record in small tractor sales, the highest volume compact tractor sales John Deere has ever seen in a single month.

“I don’t know how anyone could have thought that would happen—it’s just crazy to see the way that these things unfold,” he says.

Fortunately for Craig Taylor Equipment, finding ways to operate in a challenging environment is almost second nature. The current ownership group purchased Craig Taylor Equipment from Craig Taylor’s widow in 2013, and within a year was operating in a state smothered by recession after oil prices crashed.

“It’s been good in the sense that it’s forced us to really cut our teeth,” Devine says. “We really had to learn the industry and learn the business. When oil is $120 a barrel, a lot of mistakes or inexperience can be hidden, right? We were forced to learn the business more intimately and in a shorter period of time.”

That said, the group did anticipate a certain amount of growth that has been delayed—though not stalled—by an economy in recession followed by a pandemic. “It has taken longer than expected to get the business to where it is today,” he says. “We were hit pretty good in those early years: 2014, 2015, 2016… but the market was in a really rough place and continues to be.”

Funny enough, it’s as the pandemic continues that Craig Taylor Equipment is really finding its footing and pushing forward. “We’re confident with what we’ve been able to build, and we’re confident that we can replicate it,” Devine says.

“We’re very system and process driven operators, and we feel like we built the systems, we’ve tested the systems, we’re to a place now where we can essentially start to scale and extend those systems into new businesses effectively and efficiently so that, even though things are pretty tough, we’re able to move pretty nimbly.”

A recent big move for the company has been the acquisition from Dobbs Peterbilt of all its Alaska Peterbilt assets, which include two branch locations, equipment, and approximately forty employees.

According to Devine, the acquisition benefits both the company and its customers. “A majority of our current customers on [our] products also have the need for trucking to haul their equipment—at the same time almost all of the truckers, in one way or another, could have a need for Bobcat equipment. So in both directions there’s a lot of synergy,” he says.

Craig Taylor Equipment isn’t the only retailer making big moves despite a challenged construction industry, tricky retail environment, and the other ongoing effects of COVID-19.

Quite literally, Alaska Industrial Hardware (AIH), a Bering Straits Native Corporation subsidiary, is taking up residence in what used to be the Sam’s Club on the Old Seward Highway. AIH President and CEO Terry Shurtleff explains that the retailer, which provides hand and power tools, builder hardware, contractor and industrial supplies, and maintenance and safety products, as well as repair services, has been in need of a larger retail footprint for some time.

“We’ve been a little over capacity in our current facilities for a while,” Shurtleff says. “We’ve been looking for [potential new locations] for a while and it just came about that this facility opened up.”

The building was originally constructed in 1993 as a Sam’s Club, which parent company Walmart closed in 2018. Coincidentally, UNIT Company, the general contractor for the initial construction, was selected again—after a competitive bid process—to renovate the facility to meet AIH’s needs, with a scope of work including three new loading docks, material storage racks, and lighting upgrades.

The approximately 153,000-square-foot location will serve as AIH’s headquarters, housing corporate offices in addition to retail operations, retail support, a repair center, and a cross-stocking/laydown area, and will create the opportunity for twenty to twenty-five new jobs.

As of publication, Shurtleff anticipates that the store will open for retail business the first week of April.

While other retailers are reducing operations or shutting down entirely, some because of COVID-19 and others as a result of an ongoing decline in the retail sector, Shurtleff explains AIH has been able to maintain operations and even expand because of the type of products it sells and where it operates. “We continue to benefit from Alaska’s geography, and we continue to benefit from the immediacy of the need: when a customer needs something that we stock, they have to have it right now, they can’t wait. So we’re not completely Amazon proof, but we’re a little more Amazon proof than some other retailers,” he says.

“If a company has three people standing around and they don’t have the tools or materials they need to do the job, it’s costing them a fortune.”

But no one is exempt from the challenges of the pandemic. Much like Craig Taylor Equipment, Shurtleff says a significant struggle for AIH is getting products on the shelves or installed in the store itself—and when one is planning to open a new, flagship retail location, that’s not an insignificant issue.

“We’re pretty concerned that, because of supply chain issues we’re seeing all over the world now, we’re going to have trouble getting all the building materials we need for the new store on time,” he says.

“Right now what we’re seeing—what anybody that’s shipping around the world is seeing—are bidding wars going on. For example: nitrile gloves. We were notified a few days ago [in January] that our nitrile glove manufacturers are basically making people bid for orders that they placed because others are willing to pay more money—it’s that ugly.

“And when it gets to the dock,” he continues, “the shipping companies that had previously quoted, say $1,600 a container, are asking for the current spot price of $3,200 a container versus what they previously quoted… Across the country, if you see a hole on the shelf, odds are its COVID supply chain-related.”

So what’s everyone doing? In short, adapting.

“We’re pivoting—though I don’t like the word pivoting, everybody says that, and it seems like we are pivoting so much we are spinning in circles—we’re going to new suppliers, alternate vendors. Our people are moving to fill those holes, just like everybody in a distribution business,” Shurtleff says.

Everyone is looking for replenishment because, in specific sectors, demand for retail remains high. The same customers eyeing failing retaining walls or overgrown yards are painting walls, updating kitchens, or installing home gyms.

“We didn’t see the same, what we are calling the ‘COVID bump,’ that say a Home Depot or Lowe’s did, because we don’t carry lumber or paint; however, we did see a bump in the categories we do stock like fasteners and PPE—we do carry basically everything else to do the job.”

After a dramatic drop in sales in March 2020 as Alaska essentially shut down in response to the pandemic, construction retail saw a bit of a bounce back as Alaskans began their search for tools and supplies and a new normal. “Alaskans adjust, we adapt, we overcome: that’s Alaskans,” Shurtleff says. “What we’ve seen, at least in our market, is that Alaskan spirit that we’re going to figure this out.”

Across the state, businesses like AIH have been given opportunities to practice adapting and making do: the pandemic piggy backed a multi-year recession, which AIH was in no way immune to. “Alaska’s been in recession for five years… hard times are not exactly new,” Shurtleff laughs.

“Obviously we’ve seen contraction from different markets, so what we do is look to other product lines,” he says. Throughout the recession, AIH introduced several new product lines to its retail offerings, “so that we’re basically selling a deeper breadth of product to support the market,” including STIHL and Hilti.

“We’ve been pursuing STIHL for years but finally made the decision to put it in all of our stores,” Shurtleff explains. “It was a big move for us: it’s a great line, it’s a premium line that fit [our brand] to a ‘T’, but we had to work on them for years in order to make that happen, and fortunately it came right at the right time.”

No single fix covers the challenges, but cumulatively they’ve allowed AIH to continue to efficiently and effectively supply its customers with the supplies they need. “We’re positioned well for a recovery; we just hope it comes soon,” Shurtleff laughs.